Offshore drilling: The White House this morning Biden will use his authority under the 70-year-old Outer Continental Shelf Lands Act to protect all federal waters off the East and West coasts, the eastern Gulf of Mexico and portions of the northern Bering Sea in Alaska. The ban will affect 625 million acres (253 million hectares) of ocean. Biden said the move was aligned with both his climate change agenda and his goal to conserve 30% of U.S. lands and waters by 2030. He also invoked the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, saying the low drilling potential of the areas included in the ban did not justify the public health and economic risks of future leasing.

Renewable Diesel and Biofuels: Renewable diesel producers utilized 77% of their total operable capacity in October, the highest since July 2024. Rising utilization rates and improving margins are a welcome relief for the biofuels industry, after operators endured a rough start to 2024 as demand growth slowed, leaving the market oversupplied and forcing a number of biodiesel plant closures. Both renewable diesel and biodiesel are more expensive to produce than diesel, making suppliers dependent on government incentives such as tax credits. Among the two, renewable diesel has emerged as the preferred fuel for suppliers, as it reaps better incentives and can substitute diesel entirely. Total biodiesel production capacity fell 4.2% year-over-year to about 2 billion gallons in October, according to data released by the U.S. Energy Information Administration on Tuesday. Renewable diesel output capacity rose nearly 19% year-over-year to 4.58 billion gallons in October, the EIA data showed, as most new biofuel plants opened in the past three years were geared towards it.

Sanctions and price increase for Asian buyers: The Biden administration plans to impose more sanctions on Russia over its war on Ukraine, taking aim at its oil revenues with action against tankers carrying Russian crude. This was reported from Reuters that said came from three sources with knowledge on the matter. President Joe Biden's administration has sought to shore up support for Ukraine before President-elect Donald Trump takes office on Jan. 20, given the Republican leader's frequent complaints about the cost of U.S. support for Ukraine. The Biden administration is planning sanctions targeting tankers that carry Russian oil sold above the West's $60 per barrel price cap. Even if sold above the price cap, Russian crude has typically sold at a discount to the overall market, and China and India have been willing to purchase supplies.

Saudi Aramco, the world's top oil exporter, raised crude prices for Asian buyers in February for the first time in three months, OPEC+, which pumps about half the world's oil, decided early December to push back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026 due to weak demand and booming production outside the group. 

Market Overview: Crude oil continues to rally and are at their highest point since the middle of October. The support is coming from colder weather, followed by expectations of tighter sanctions on Iranian and Russian oil exports. The past week we saw oil move up almost five times in a row due to the hopes Chinas economy was looking optimistic along with the United States economy showing positive reports. Looking forward we will want to watch what the Federal Reserve does with interest rates along with what sanctions will do to the exports from Iran and Russia. More support is expected in the near term with the Biden administration planning on putting in more sanctions on Russia's oil exports over its war on Ukraine, and Saudis raising their price for buyers in Asia which can indicate firmer demand expectations. 

Venezuela exports continue to rise. 

Venezuela's oil exports rose 10.5% last year despite political instability and changes to the U.S. sanctions regime on the country, as partners of state oil company PDVSA took more cargoes under licenses granted by Washington. U.S.-sanctioned PDVSA PDVSA.UL and its joint ventures exported an average of 772,000 barrels per day last year, the most since 2019 when energy sanctions were first imposed by Washington, according to vessel movement data and company shipping reports. A large portion of the year's export gains came from U.S. oil major Chevron's  shipments of Venezuelan crude to the U.S. under a license in place since early 2023. That license has allowed the producer to recover millions of dollars in outstanding debt from Venezuela.

Crude gave everyone a nice whiplash starting up on the day, which quickly came back down to landing up slightly. Support came initially from the winter storm that is marching across the Unites States along with a newspaper report that President-elect Donald Trump was mulling tariffs that would only be applied to critical imports, potentially a relief for countries that were expecting broader levies. The dollar was impacted which sent it going lower. A weaker U.S. currency makes dollar-priced commodities like oil cheaper for buyers using other currencies. This news report was soon found out and declined by President-elect Trump. This then changed the markets just as fast.